Utah Medical Products Reports 14.4% Revenue Decline in Q1 2025

Utah Medical Products, Inc. (UTMD) reported its financial results for the first quarter of 2025, revealing a decline in both revenue and profitability compared to the same period in 2024. The company generated net sales of $9.71 million, a decrease of 14.4% from $11.34 million in the first quarter of 2024. Gross profit also fell to $5.54 million, down 18.1% from $6.77 million, resulting in a gross profit margin of 57.0%, compared to 59.7% in the prior year. Operating income decreased to $3.15 million, reflecting an 18.8% decline from $3.88 million, while net income was reported at $3.04 million, a 23.1% drop from $3.96 million in the previous year.

The decline in revenue was primarily attributed to a significant drop in OEM sales to PendoTECH, which accounted for $1.48 million of the decrease, representing 91% of the total sales decline. Excluding PendoTECH, domestic sales increased by 9%, while sales outside the U.S. decreased by 14%. The company noted that the overall sales decline was exacerbated by unfavorable foreign currency exchange rates, which had a minor impact on reported figures. The average foreign exchange rates for the quarter showed slight fluctuations, with the Canadian dollar and Australian dollar weakening against the U.S. dollar.

In terms of operational metrics, UTMD's total current assets remained stable at $96.40 million as of March 31, 2025, compared to $96.33 million at the end of 2024. The company reported a slight increase in cash and investments, totaling $83.33 million, up from $82.98 million. The total liabilities increased to $5.47 million from $5.11 million, while stockholders' equity decreased marginally to $117.05 million from $117.43 million. The company’s employee headcount remained consistent, with no significant changes reported.

Strategically, UTMD has continued to focus on share repurchases, having bought back 313,120 shares over the past four quarters. This activity contributed to a reduction in the number of shares outstanding, which fell to 3.31 million from 3.62 million year-over-year. The company also maintained its commitment to research and development, although R&D expenses decreased to $154,000 from $266,000 due to the completion of one-time testing and certification processes in the previous year.

Looking ahead, UTMD management anticipates that revenue trends will remain consistent with the first quarter results for the remainder of the year. The company projects a similar percentage decline in gross profit margin, reflecting ongoing challenges in manufacturing overhead costs that did not decrease proportionally to sales. Despite the current challenges, management remains optimistic about achieving its financial performance targets for 2025, supported by a strong cash position and ongoing operational efficiencies.